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2015 (1) TMI 553 - AT - Income TaxDisallowances u/s 40(a)(ia) - non deduction of tax at source u/s 195(1) on usance charges paid to a non resident through an intermediatory bank - whether the Assessee was bound to deduct TDS u/s 195(1) in respect of usance charges paid by the Assessee on import of raw material from countries outside India like Japan, Belgium, Germany, USA etc.? - Held that:- It is apparent that the Hon'ble Supreme Court has not reversed the decision in the case of CIT vs. Vijay Ship Breaking Corporation, (2003 (3) TMI 91 - GUJARAT High Court ) on the finding that the usance charges are not interest u/s 2(28A) except where an undertaking is engaged in the business of ship breaking in view of explanation (2) to Sec. 10(15)(iv)(c) inserted by the Taxation Laws (Amendment) Act, 2003 with retrospective effect. In our view, the decision of the Hon'ble Gujarat High Court has impliedly been approved by the Hon'ble Supreme Court in respect of Assessees who are engaged in the business of ship breaking. We, therefore, set aside the order of CIT(A) and allow the appeal of the Revenue. - Decided in favour of revenue.
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